THE STUDY MAY 17, 2012
Today, the White House is expected to announce new steps designed to ease investment in Burma, the notoriously closed-off country whose ruling junta, to nearly everyone’s surprise, has recently begun to liberalize. The White House’s decision follows years of sanctions against Burma, but it’s far from clear that sanctions spurred the government’s recent reforms. In fact, their efficacy has long been disputed. What made effective sanctions against Burma so difficult?
According to a 2004 analysis by the International Crisis Group, it’s difficult to hobble Burma’s economy because Burma doesn’t have much of an economy to begin with. “The country does not have a modern economy,” the report declares. “Most people still live at a subsistence level,” and “the informal economy may be as large as or larger than the formal economy.” What’s more, the ICG notes, the country has sufficient resources to persevere, if weakly, even in extreme isolation. Burma “is self-sufficient in food, and the domestic economy is large enough for the army to extract what it needs to function.” Even in the face of those constraints, however, policymakers have for years pursued sanctions against Burma, hoping they would eventually topple the junta by triggering an economic collapse. That, according to the ICG, is an unrealistic hope: “There is very little,” it points out, “that can collapse.”